This is a guest post from Sara Williams who writes about everything to do with debt, from mortgages to bankruptcy, at Debt Camel.
You often see articles about how important it is to keep an eye on your credit score. And they normally tell you how to do that.
But not many of them list more than one way… or tell you how many different ways there are.
Have a guess how many reports there are…
Three or four are popular answers. Some people know one way and reckon there must be a few more. Other people have heard there are three Credit Reference Agencies – Experian, Equifax and CallCredit and assume there is different report for each of them.
Some people have heard that there are free options and some which give you more details that you have to pay, so they go for more, say six or eight.
There are more than 17!
I wrote an article listing all the different ways about two years ago. At that point there were eleven different reports you could get.
I try to keep it up to date. After a year it had gone up to 13. And now there are an astonishing 17 different ways. See The best ways to check your credit score where I list them, saying what each one shows and what they cost – about half of them are free.
(Actually I know there are more, because there is at least one that I refuse to list because it seems to work by signing people up for a free when they go on a payday loan broker site, only telling them in the small print and then charging £15 a month after that. The only comments about it I could find online were from people saying they had never heard of it and want to know how to cancel it.)
Why on earth are there so many?
That is a good question. Obviously it must be profitable – most of the ones that are “free” make their money from suggesting loans and credit cards you could get – they get referral fees if you click through.
But I think the underlying reason is that most people don’t really know much about credit reports and so it’s easy for a report which is at best OK to make it sound like the best thing ever.
No report currently has everything you need
One annoying thing about these 17 reports, is that none of them have all the information you may need.
I said there are three Credit Reference Agencies. These don’t just calculate your score slightly differently, they actually have different information about your borrowing. Lenders report to Credit Reference Agencies on whether you have paid your loan or credit card on time and whether you are using your overdraft.
But a lender doesn’t have to report to all three credit reference agencies, and only a few big ones do this as it costs them money. So if you look at a report based on one Credit Reference Agency data it may not show all your borrowing.
I often have people asking why they have a good Experian credit score and a poor Noddle score (Noddle is the free report on the CallCredit data). The answer isn’t that one of them is more accurate, but they are reporting on different things.
The other very annoying thing is that many of the reports don’t make this clear. It’s buried away in the small print what credit reference agency data they use, but it isn’t obvious at all to a casual user.
It would be great if this changes in the next year and one comprehensive report gives you all the information you need. When that comes I will be updating my article and celebrating!
The good news
Until then, the good news is that there are three free reports that give you everything you need at the moment – detailed information (not just the credit score) from each of the Credit Reference Agencies.
So there is no good reason to pay a monthly fee. Honestly, paying £10, £15 or even £20 a month for this is a complete waste of money.
Some fee charging reports can be run every day, whereas the free reports are usually only updated once a week or once a month. But credit scores only change pretty slowly. Lenders only send a batch report to a credit reference agency once a month. So if you check your expensive daily report every day, after 9 days you will see your latest loan repayment show up. And after 18 and 20 days your two credit cards will be updated.
Some fee charging reports claim they will help you resolve any problems with the Credit Reference Agencies. But if there are problems it’s best for you to go straight to the creditor and explain why something needs to be changed. All the Credit Reference Agencies do is report on what they are told, and if you tell Equifax, say, that there is a problem with one of your credit card information, they just forward your comment to the credit card lender.